Monday, September 13, 2004
Tax-Free Zones Offered to Retain and Create Jobs
The Michigan Economic Development Corporation announced a call for applications for the Tool and Die Recovery Zone program today. Recent amendments to the Michigan Renaissance Zone Act allow the MEDC to designate up to 20 tax-free Tool and Die recovery Zones. State and local taxes in the zones may be abated for up to 15 years.
"Renaissance Zones have been extremely effective in creating jobs and attracting new investment in economically challenged areas of the state," MEDC President and CEO Don Jakeway said. "Extending the program to tool and die companies will help them remain competitive in the global market and keep the industry firmly rooted in our state."
In order to qualify for the zone designation, the parcel of property must be leased or owned by a qualified tool and die business and used primarily for tool and die operations. Other criteria include:
The company must have fewer than 50 full-time employees;
The local government board must agree by resolution to the abatement of the business' local taxes;
The business must enter into a qualified collaborative agreement which designates synergistic opportunities with other qualified tool and die businesses, including collaborative marketing and the development of standardized processes and management methods.
Applications must be made to the MEDC by the end of October, 2004.
"This will be an excellent incentive to encourage collaboration among Michigan's tool and die companies," Jakeway said. "Helping this industry is a smart investment for the state. The dividends will come in the form of increased jobs in a business sector that has been hit hard by overseas competition."
Renaissance Zones are regions of the state set aside as virtually tax-free for any business or resident presently located in or moving to one of the zones. The program has been successful and was expanded to 35 zones from the original 11 established in 1996. There are now 166 geographic areas in Michigan that is virtually tax-free as a result of Renaissance Zone designations.
The Michigan Economic Development Corporation, a partnership between the state and local communities, promotes smart economic growth by developing strategies and providing services to create and retain good jobs and a high quality of life.